Global production of batteries for electric cars is concentrated in Asia, with Chinese, Japanese and South Korean firms dominating the sector and building factories in Europe to conserve their supremacy. However, Europe is looking to strike back, with France and Germany saying they would form an alliance to develop next-generation batteries in a bid to counteract Asia’s dominance.
Lithium-ion batteries are a — if not the — crucial component of electric vehicles, but few companies have ventured into actually making them given the huge cost of setting up manufacturing facilities and the still limited demand. Car manufacturers have preferred to have a choice of several specialised suppliers, especially as battery technology is rapidly evolving.
China, where half of electric cars are currently being sold, requires car manufacturers to use locally-built batteries and is calling the shots in the industry with two-thirds of the world’s production capacity of lithium-ion cells for batteries. Only Asian firms appear in the top 10 of the industry: China’s Contemporary Amperex Technology accounted for 23 per cent of global production last year, edging out Japan’s Panasonic at 22 per cent.